Black Friday – how to be a winner in the retail game

Originally imported from the US, where retailers traditionally cut prices the day after Thanksgiving, Black Friday hit the UK with a vengeance in 2014. Sales reached £810m with over 400,000 online orders logged in one day.¹ Online, websites struggled to cope with the huge influx of traffic, while offline queues built up to the point that violence erupted in some stores. As UK retailers and consumers prepare for this year’s event, Glen Burson, Chief Technology Officer at Salmon and author of The Black Friday Playbook, talks us through the lessons learned last year – and what to expect this time around.

About the author

Glen Burson is Chief Technology Officer at Salmon, a global ecommerce consultancy working with major worldwide brands. He is the author of The Black Friday Playbook, which offers online retailers insight to help them plan and prepare.

The 27th November 2015 could prove to be the UK’s first £1bn online shopping day with 30% of online shoppers making a purchase in a single 24 hour period.2 That’s a huge opportunity for retailers and their supply chains, but it’s also a risk.

Last year the UK saw some retailers struggle with the unprecedented demand driven by aggressive price cuts and the hype around Black Friday. Whilst retailers hoped that this traffic would drive additional revenues, our experience was that the Black Friday phenomenon was in fact shifting traditional Christmas spend to this new sale period, rather than increasing overall revenue. This leaves retailers at risk of eroding margins without significantly increasing sales over the Christmas period.

Whilst there was talk that those hits could lead to retailers scaling back this year, what we’re actually seeing is greater planning and increased focus on preparation. If there’s any scaling back this Black Friday, it may be around price point, not activity. I expect to see smarter strategies from UK retailers in 2015; they can’t be caught on the back foot this time around.

Some retailers won’t participate at all of course – Black Friday isn’t a universal phenomenon. On the high street, John Lewis has called for a boycott, but based on feedback from the businesses we work with, few are heeding the call. Instead, those businesses are still looking to capitalise on Black Friday and the fact that consumers are, fundamentally, attracted by price. Good service is a bonus, and will win you repeat business, but it doesn’t hit the headlines the way big discounts do. Nonetheless, smart retailers will still be planning to better protect their margins this year.

Planning for increased demand

The key to a successful Black Friday is planning. Customers will recall the chaos on shop floors in 2014, for example, so it’s a great opportunity for online retail, which I believe will increase significantly this year. But whether online or instore, failing to cope with the pressures of Black Friday carries serious reputational risk. These steps can help any retailer to mitigate that risk and make the most of the opportunity.

Review 2014. What went well? What didn’t?

Be holistic. You can’t run a successful sales campaign, especially one the size of Black Friday, without engaging the whole business. That includes IT, marketing, supply chains, fulfilment and distribution.

Plan your promotions. Staggered sales are becoming popular, either hourly or over the whole weekend, rather than just having one sale that starts in the early hours. This approach could help spread the pressure and facilitate fulfilment.

Understand your targets. Consider what your expectations are based on, and how you will monitor progress. Define acceptable profit margins and stick to them.

Value your people. Plan your sales period and organise shifts and breaks to allow your team to maintain both the pace and team morale.

Test and test again. Ensure capacity testing on your website to check it can deal with the potential increase in volume. Offline, check that your operations team are trained to cope.

Create a communication plan. Keep the business informed, and ensure you have an effective means to communicate changes or challenges.

Have a contingency. Consider potential pressure points and be ready to react if things go wrong. For example, having IT on hand to help with any outages could help protect your reputation.

Review, take stock and move on. Monitor and assess your strategy this year, and you’ll be in even better shape to seize Black Friday opportunities in 2016.

It may be a US phenomenon, but UK retailers can’t ignore Black Friday. The trick is to make it a smooth and seamless shopping experience – and not the frustrating frenzy many consumers witnessed last year. The difference is preparation.

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